February 24, 2025
These guest blogs are written by leaders in our sector, sharing their expertise and insights through the DNS platform. This edition has been written by Robert Chambers, CEO of Sandbox ERP, who showcases the impact of technology in the lumber and building supply industry.
Preserving Community Roots: How Local LBM Dealers Can Compete with QXO
The lumber and building supply (LBM) industry is at a crossroads. For decades, local dealers have been more than just suppliers—they’ve been the backbone of rural communities. From sponsoring little league teams to donating time and resources to local initiatives, these businesses have built a legacy of trust and reliability. They’re the friendly faces who know their customers by name, offer expert advice, and go the extra mile to help homeowners and contractors alike get their projects done.
But as the world evolves, so do the demands of the market. Today, a perfect storm of factors—population shifts, technological advancements, and industry consolidation—is reshaping the landscape. Small LBM dealers, once the heart of their communities, now face unprecedented challenges. To survive and thrive in this new era, they must adapt without losing the personal touch that has made them indispensable.
As someone deeply embedded in this industry, I’ve seen firsthand how these changes are playing out. From outdated systems to the rise of tech-savvy competitors the challenges are real, but so are the opportunities. In this post, I’ll break down the forces driving this transformation, explain how QXO is poised to disrupt the industry, and share actionable strategies for small dealers to not only compete but thrive in this new era.
Whether you’re a family-owned business transitioning to the next generation or a contractor looking to streamline your operations, this post will provide valuable insights to help you navigate the changes ahead. Let’s dive in.
Why is This Happening?
The demand for building materials is surging due to several key factors:
- Population growth in rural areas: More people are leaving cities for smaller communities, increasing the need for new housing and renovations.
- A housing shortage: With limited housing stock, new builds and remodels are necessary to meet demand.
- The rise of remote work: Working from home is no longer a temporary trend, further driving migration and construction in rural areas.
As a result, independent dealers face both new opportunities and new challenges. Those who can adapt to this changing landscape will thrive, while those who resist modernization risk being left behind.
Old Systems vs. New Demands
If you’ve ever walked into a rural building supply store, you’ve likely noticed outdated software, paper-based systems, and manual processes keeping things running. But change is happening:
- Family-owned businesses are transitioning to the next generation.
- Younger owners want to improve customer experience by embracing technology.
- They’re looking to replace tedious, labor-intensive work with automation.
The Challenge of Outdated Solutions
Current industry solutions are outdated and difficult to integrate with:
- E-commerce platforms that aren’t industry-specific
- Supplier EDI (Electronic Data Interchange) systems
- Payment processing solutions
- Digital takeoff software for design and blueprints
As industry consolidation increases, small businesses must adapt. Relationships alone are no longer enough to stay competitive.
Enter QXO: A Game-Changer
Last year, Brad Jacobs’ company QXO announced its mission to disrupt the North American and European building supply industry. This is a playbook similar to Jacobs’ other companies, including XPO and RXO:
- Raised $5 billion in cash
- On a path to become a $50 billion business in a $800 billion industry
- Will leverage AI and modern technology to streamline supply chains
Why Target Building Materials?
QXO’s research showed the lumber and building supply industry scores just 6/10 for customer experience. The top complaints:
- Late product arrivals – that delay projects and cost contractors money.
- Incomplete orders—contractors need all 10 items, but only 6 show up.
- Wrong deliveries that disrupt timelines and add costs.
QXO’s Strategy: The “Amazon of Building Supply”
To fix these problems, QXO plans to:
- Build centralized distribution hubs across North America.
- Acquire suppliers that manufacture or distribute materials.
- Ensure cost-effective, on-time deliveries directly to job sites.
The Impact on Local Supply Dealers
While small, one-off purchases will always exist, 85% of lumber and building supply revenue comes from project work through contractors. To stay competitive, local dealers must modernize their operations.
The E-commerce Shift
Currently, only 3% of the industry has an e-commerce solution. E-commerce in this industry isn’t just about selling materials online to Joe off the street—it’s about empowering contractors with a contractor portal, including:
- Contractor-specific pricing
- Self-service quote-building tools
- Access to invoices and deliveries organized by project
- Consolidated account statements
- Online delivery management and real-time inventory insights
- On-account purchasing
For small contractors, these digital tools streamline project management and reduce administrative headaches by keeping them focused on delivering the project.
Sandbox ERP: A Modern Solution
Traditional industry software solutions — whether cloud-hosted or on-premises — are often expensive and time-consuming to integrate. That’s where Sandbox ERP comes in:
✅ Cloud-native and purpose-built for lumber & building supply businesses
✅ Seamlessly integrates with key industry platforms
✅ Out-of-the-box connection with Toolbx for e-commerce & contractor portal
✅ Supplier system integrations
✅ Digital e-tag system support for real-time price updates
As a small Canadian software startup, our mission is to help independent dealers and supply & install companies compete against the bigger logos. We believe every dealer deserves enterprise-grade software—without the enterprise-sized budget or administrative burdens.
Embracing Change: The Key to Survival, Growth, and Profitability
In an industry that has long lagged behind in technology, modernization is no longer a choice—it’s a necessity for survival, growth and profitability.
If you’re ready to modernize your operations or want to discuss how Sandbox ERP can help your business compete, let’s connect. Reach out to me on LinkedIn or visit our website.
Robert Chambers
CEO, Sandbox ERP